By Peter McKay
Strong earnings from Exxon Mobil and bullish comments from coal
analysts boosted the energy sector, which led a broad stock-market
rally.
The Dow Jones Industrial Average (DJI) was recently up 91.52
points, or 0.9%, at 10159.23, led by a 2.9% gain in Exxon (XOM),
which reported fourth-quarter earnings above analysts'
estimates.
Elsewhere, analysts at Davenport & Co. touted coal stocks in
a client note, citing upbeat outlooks issued by industry executives
at a conference last week. The report helped to push Massey Energy
(MEE) up 6.6%. Consol Energy (CNX) was up 6.8%
Other commodity producers rallied. Alcoa (AA) was up 3.6%. US
Steel gained (X) 5.8%. Freeport-McMoran Copper & Gold (FCX)
rose 6.1%..
The stock market attracted some additional buyers following the
late-morning release of new data from the Institute for Supply
Management, which said U.S. factory-sector activity booked its best
performance in more than five years in January. Hiring continued to
recover and inflationary pressures quickened.
"The market today has stopped overriding good earnings and
economic data, which is good to see," following January's dismal
performance, said portfolio manager Bill Stone, of PNC Advisors in
Philadelphia. "Hopefully, this means the correction has run its
course."
Investors on Monday are trying to turn the page on last month's
3.5% decline in the Dow, the biggest monthly decline since February
2009. The recent slide coincides with what has generally been a
wave of better-than-expected profit reports, though investors often
bet last month that share prices had factored in the strong
earnings prior to earnings season.
Other economic data on Monday weren't as strong as the ISM
report. The Commerce Department said construction spending fell in
December much more than expected, reflecting commercial real estate
weakness. And while personal income rose by more than expected,
climbing 0.4% in December, personal spending rose by 0.2%, less
than economists had predicted.
The reports continue a recent string of hot-and-cold data that
have kept the stock market in check. While most traders and
analysts are confident that the U.S. economy is recovering, there
is increasing worry that it is currently enjoying a one-time bump
as businesses restock their inventories following the recent
financial crisis.
In a worst case, that process would run out before consumers are
ready to step in to fuel the next wave of demand for goods to drive
corporate profits.
The Standard & Poor's 500-share index (SPX) climbed 1.1%,
with all of its sectors in the black, led by the energy and
materials sectors. The Nasdaq Composite (RIXF) rose 0.9%. Its gains
were limited by a 6.8% slide in component Amazon.com (AMZN) after
the online retailer conceded defeat in a battle with publisher
Macmillan over the price of e-books.
Oil futures and gold futures climbed while the dollar was lower
against the euro but higher against the yen. Treasurys fell, with
the two-year note (UST2YR) off 3/32 to yield 0.867% and the 10-year
note (UST10Y) down 19/32 to yield 3.660%.